Hunting Regulatory News (HTG)

Hunting PLC

("Hunting" or "the Company" or "the Group")

2020 Year End Trading Update

Hunting PLC (LSE : HTG), the international energy services group, today issues a year-end trading update. The Group will be reporting its 2020 Full Year Results on Thursday 4 March 2021.

Jim Johnson, Chief Executive of Hunting, commented:

"As the Group approaches the year-end, market indicators including the WTI oil price, the onshore rig count and the number of active frac crews in the US, have all shown modest increases throughout the quarter which will support activity levels going into the New Year. With this market backdrop, coupled with a significantly lower cost base, where c.$81m in annualised savings have been achieved in the year to date, management anticipates an improving performance for the year ahead.

"The Group's actions to restructure our global businesses during 2020 will also lead to further efficiencies being recognised as activity levels ramp up. With the closure of our Canada manufacturing operation and partial divestment of our Drilling Tools business, coupled with further consolidation in Singapore and USA, our business footprint is leaner and better positioned for the forecast return to growth. Our year end headcount will be below 2,000 employees, or a reduction of 34% since the start of 2020.

"Hunting continues to develop and launch new products and technology to clients. In the year, 39 new patents were successfully issued globally, supporting the Group's strong intellectual property portfolio. As highlighted previously, efforts to develop non-oil and gas related sales continue throughout the Group.

"Our efforts to reduce working capital in the year have been successful which has led to a cash and bank position of $94m as at 30 November 2020. Inventory levels continue to decline, and will likely result in a closing position at the year end of below $300m."

Trading Update

As anticipated, the performance of the Group during the final quarter of the year has reflected slightly lower revenue compared to the previous two quarters, as an improving US onshore market is offset by lower international activity, primarily in our North Sea market, while other offshore projects have been delayed due to COVID-19 related issues. In the year to 30 November 2020, Group EBITDA has been c.$26m, with Q4 2020 likely to report a small EBITDA loss, given the caution exhibited by clients in respect to capital spending due to market uncertainties and low commodity prices, coupled with the usual seasonal slowdown.

The Group continues to report a strong cash and bank of c.$94m as at 30 November 2020, as working capital improvements continue to generate cash. Given this positive cash position the Board has agreed a programme to purchase up to 4.0m Ordinary shares for transferring to our employee share trust. These shares will be used to satisfy future vestings under the Hunting Performance Share Plan.

Inventory levels at 30 November 2020 were c.$304m, reflecting a continued focus to reduce stock. Capital investment for the full year is projected to be c.$17m.

Hunting Titan's trading results have improved since the half year point, with the business reporting increasing revenue and a broadly break-even result in November, supported by an improving product mix and lower cost base. New order intake in November for Hunting Titan was the highest since the start of the pandemic, demonstrating a slowly strengthening order book.

Hunting's US businesses reported relatively stable revenue in October and November as the segment continues to record modest activity levels. As announced on 15 December 2020 the segment has divested its Drilling Tools business and assets to Rival Downhole Tools in exchange for a 23.5% equity position in the enlarged Rival business, which allows the Group to retain a presence in the onshore drilling tools rental market, but with a reduced capital requirement.

The Group's EMEA segment reports a continuing decline in activity within the North Sea, leading to losses in the period. The business has completed a headcount reduction during the quarter to reduce its cost base, however, all current market indicators suggest that clients in the region will be recommencing drilling programmes in 2021 which will support a recovery in this segment.

In Asia Pacific, the segment has reported lower revenues in November 2020, compared to the prior month, as international markets continued to slow. However, the segment has remained profitable in the quarter.

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About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.

The Group reports in US dollars across five segments: Hunting Titan, US, Canada, Europe, Middle East and Africa ("EMEA") and Asia Pacific. From 1 January 2021, the Group's Canada business will be incorporated into the US operating segment.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.